PeopleSoft gains on 3Q, analyst talk

January 2, 20024:43 PM PST

PeopleSoft Inc. (Nasdaq: PSFT) was one of the few gainers on the Nasdaq charts Wednesday; shares rallied 11 percent after the company reported a strong third quarter, announced a repurchase plan and a new CFO, and got some upgrades.

Shares in the maker of business management software were up 3.56 to 36.31.

ING Barings on Wednesday upgraded PeopleSoft to "buy" from "hold," due to strong third quarter results.

Analysts William Lanzon and Nathan Palmer said in a research note that they raised their ratings on the company "based on growing momentum and a strengthening pipeline," and put a price target of $45 on the stock. That's 7 times ING Barings' 2001 revenue estimate, and is in line with the company's peer group, they said.

Revenues, net income and net income per share from recurring operations for the third quarter were $443.1 million, $23.4 million and 8 cents a share, respectively. This compares with revenues and net income of $346.1 million, $0.5 million and a break even amount per share for the third quarter of 1999. It also tops First Call's expected profit of 7 cents a share.

Net income for the quarter including non-recurring items was $68.7 million, or 23 cents a share. Non-recurring items include gains from the sale of equity securities of $120.1 million ($73.9 million after-tax) and product exit costs of $35.9 million ($28.6 million after-tax).

The company also announced a share repurchase plan Tuesday night; the company plans to repurchase up to $100 million in common stock over 12 months.

"With over $1 billion in cash and investments today, we believe a repurchase plan is in the best interests of all shareholders," said CEO Craig Conway in a statement.

PeopleSoft also announced some executive shifts; Chief Financial Officer Steve Hill has been promoted to senior vice president of business development. Kevin T. Parker joins PeopleSoft as senior vice president, finance, and CFO.